Mexico's drug cartels siphon liquid gold

Bold theft of $1 billion in oil, resold in U.S., has dealt a major blow to the treasury

By Steve Fainaru and William Booth
Washington Post foreign service
Sunday, December 13, 2009

MALTRATA, MEXICO -- Drug traffickers employing high-tech drills, miles of rubber hose and a fleet of stolen tanker trucks have siphoned more than $1 billion worth of oil from Mexico's pipelines over the past two years, in a vast and audacious conspiracy that is bleeding the national treasury, according to U.S. and Mexican law enforcement officials and the state-run oil company.

Using sophisticated smuggling networks, the traffickers have transported a portion of the pilfered petroleum across the border to sell to U.S. companies, some of which knew that it was stolen, according to court documents and interviews with American officials involved in an expanding investigation of oil services firms in Texas.

The widespread theft of Mexico's most vital national resource by criminal organizations represents a costly new front in President Felipe Calderón's war against the drug cartels, and it shows how the traffickers are rapidly evolving from traditional narcotics smuggling to activities as diverse as oil theft, transport and sales.

Oil theft has been a persistent problem for the state-run Petroleos Mexicanos, or Pemex, but the robbery increased sharply after Calderón launched his war against the cartels shortly after taking office in December 2006. The drug war has claimed more than 16,000 lives and has led the cartels, which rely on drug trafficking for most of their revenue, to branch out into other illegal activities.

(More here.)